What counts as a self employment expense?

Modified on Tue, 31 Jan 2023 at 08:26 PM

If you earn self-employment income or have your own company, you can deduct qualifying business expenses from your tax return to lower your tax bill. Top business deductions include advertising costs, the home office deduction, business supplies, travel, educational expenses, and more.

When running your own business or even operating as a sole proprietor who earns money through freelancing, you may spend money to advertise your services. This could include paying to host or build a website, signing up to be featured in relevant newsletters, or even a premium LinkedIn account. These costs can be deducted when filing your taxes.

If you work from home, you may also be eligible for the home office deduction. To qualify, your home office area — it can be a separate room or space within a room — must be used solely to run or work on your business.

In addition, you can deduct business supplies, like your laptop or other equipment needed for your craft. For example, if you’re a freelance photographer, the cost of your camera, new lenses, tripods, camera bags, and other supplies could be deducted on your tax return. Subscriptions to trade or business organizations can also often be written off when filing your taxes. And, if you travel for your job, you can even write off your mileage, airfare, or other travel costs.

Lastly, most self-employed individuals overlook educational expenses, but if you purchase books, online courses, or even attend local college classes to further your trade, you can deduct some of these expenses from your taxes.

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